Friends
I have mixed feelings about the “Occupy Wall Street” crowd. Are they somewhat a disjointed mess of typical liberal causes? Yes. Are many of them just kids looking to get in on the action? Yes. Are some of them just bums that have nothing better to do? Yes. On the other hand, do I think that way too many people got away with basically bringing the U.S. capitalistic system to its knees? Yes.
Look, there is a lot of blame to go around, but I did not see enough people being held accountable. What about lenders who knew they were making terrible loans, but all they had to do was dump them on Wall Street’s doorstep? How about Wall Street who took the garbage and repackaged it into securities to sell for profit? How about the rating agencies, S&P and Moody’s, who for a fee were happy to rate this garbage AAA? How about the politicians who propped up Fannie and Freddie telling us that they were sound and that everyone had the right to own a home? Not to mention the awful job of oversight and enforcement of government agencies (see Bernie Madoff)? Oh, and how about the personal responsibility of the individuals who were borrowing money they had no way of repaying?
Those who ran Fannie and Freddie into the ground walked away with fortunes. Many of those who ran investment firms into the ground (and put a lot of people out of work) walked away with fortunes. No one from the rating agencies were held accountable. I never saw a crooked lender put in jail. I don’t see Barney Frank and his buddies held accountable for telling us that Fannie and Freddie were sound and that we had nothing to worry about. Sure, keep borrowing. Keep spending.
Is there reason for outrage? Absolutely. Heck the Tea Party started with the same “no bailout” outrage a few years ago. Many people feel that their country has forgotten them. I get it. There is reason to “occupy”. The only problem is, it is hard to take these folks seriously when most of them don’t really know why they are there. This is a wake-up call for America. Jobs, as we continuously say, are the key. Politicians should be spending every moment of their day working on ways to create an environment that incents businesses to create jobs. Let’s hope we heed the call. In the meantime, causing disruption to businesses in U. S. cities is not helping, and God help us if they become violent. Let’s hope cooler heads prevail and thoughtful grievances are heard.
I’ll end with this thought. There is a big difference in this country between those who have done well and those who have done wrong. The protestors don’t seem to be differentiating between the two right now. There are plenty of bad actors to direct anger towards, but not toward everyone who has succeeded in this country. Oh, and by the way, how many of the anti-capitalist protesters took a break today to get in line to buy the new I-Phone 4 S at the local Apple store? Just wondering.
As for the market, we resumed our rally in stocks as the Dow Jones Industrial Average was up 166 points and is now positive for the year. The S&P 500 was up 20 points to close at 1224. The S&P is still negative for the year but a few weeks ago it was down by 10%. Now the S&P is down only about 2% for the year. Volume was light, but we’ll take it.
We are counting on a lot of good things happening in Europe, so we’ll see if we can keep this rally rolling next week. In the meantime, we will continue to watch earnings as the bulk of reports come in the next two weeks. Bond yields inching up seem to be a good sign, hopefully signaling that the economy might avoid recession which could spark an allocation shift into stocks.
We’ll be watching Europe and earnings reports next week and keep you informed.
Have a nice weekend everyone.
